Mississippi’s Future at Risk: Why Eliminating the Income Tax is the Wrong Path

At a time when our schools need more teachers, our hospitals are fighting to stay open, and our roads are crumbling, Mississippi lawmakers are making a dangerous gamble with our future.

House Bill 1 (HB 1), recently passed by the Legislature during the 2025 Session, sets the state on a path to eliminate the personal income tax—Mississippi’s most reliable revenue source. This reckless move risks slashing more than $2 billion from the state budget each year, threatening the very services that keep our communities strong.

What Will HB 1 Do?

• Drops flat income tax rate from 4.4 percent this year to 3 percent in 2030 (an annualized cut of $647 million)

• Additional cuts to the income tax rate down to 0 percent will occur beginning in 2031 based on the state meeting a meaningless revenue growth trigger set at .85%

• Drops sales tax on grocery purchases from 7 percent to 5 percent on July 1, 2025 (an annualized cut of $127 million)

• Approximately $200 million in additional revenue for roads and bridges will be produced through a 9-cent increase in the fuel excise tax over a 3-year phase-in period

• Creates a Tier 5 in the Public Employees Retirement System (PERS) for newly hired government workers after March 2026 that slashes benefits in half compared to current members, putting public sector recruitment and retention at risk particularly for teachers and public safety personnel

Read More about Potential Impacts

Who Really Benefits from HB 1?

Let’s be clear: this isn’t tax relief for everyday Mississippians. The wealthiest 1% will see an average annual tax cut of $41,000, while low-income families might save just $42. Meanwhile, rural towns, working families, and public sector workers will bear the brunt of disappearing resources.

The trade off between raising the gas tax and slightly reducing the grocery tax means higher costs at the pump and fewer dollars for schools, healthcare, and infrastructure for most working families in Mississippi.

The Risks Are Real

Without stable funding:

• Class sizes will grow and teacher shortages will worsen. Tuition will increase at Mississippi's colleges and universities.

• Rural hospitals could shut their doors for good.

• Delayed repairs will make our roads and water systems more dangerous.

• State credit ratings could fall, making it more expensive to borrow for essential projects.

  
  

We’ve Seen This Before

States like Kansas and Arizona have tried similar tax-cut schemes—and they failed. Budget crises, slashed services, and economic stagnation followed. Mississippi should learn from their mistakes, not repeat them.

What Mississippi Needs Instead

We deserve a government that works for everyone—not just the wealthy few. That means:

• Fair tax policies that don’t overburden working families.

• Strong investment in schools, health care, and infrastructure.

• A Mississippi Child Tax Credit to reduce child poverty and support families.

• Legalizing Marijuana to increase tax revenues, job growth, and investment opportunities.

• Real transparency and accountability from lawmakers about the cost of their choices.

  
  

Let’s Build a Better Path Forward

Mississippians deserve more than vague promises of growth. We need a bold, inclusive vision that invests in our people and communities. Let’s demand better. Stop the cuts. Start investing in Mississippi.